Tom Brownlee: ADR is a faster, cheaper and more flexible route to resolving disputes

Alternative Dispute Resolution (ADR) has traditionally been seen as the unusual route to resolving disputes in Scotland with litigation remaining the preferred option. However, alternative forms of dispute resolution are now being used with increasing frequency and success throughout Scotland, raising the question of whether the previously unconventional is now becoming the norm.

Tom Brownlee is a Senior Associate with Clyde & Co
Tom Brownlee is a Senior Associate with Clyde & Co

To address this issue, the Holyrood Justice Committee published a paper on 1 October considering ADR in Scotland, where it is used successfully at present, and where it could be used with greater effect in the future.

The main types of ADR used in Scotland are mediation, conciliation, arbitration, adjudication or ombudsmen.

Whilst speed, flexibility, confidentiality, and economy are generally considered the key advantages to ADR, there is no ‘one size fits all’ dispute resolution tool. ADR is not the perfect solution to every dispute, often exacerbating power imbalances between parties, particularly in relation to domestic abuse and family disputes. Angela Grahame QC, providing evidence to the Committee, highlighted that different ADR methods have advantages and disadvantages and not all would be appropriate for everyone.

So where is ADR being used currently?

Around 75 per cent of cases referred to the Edinburgh Sheriff Court Mediation Service result in a settlement agreement. Around half of those cases which don’t settle at mediation are settled prior to any evidential hearing. A pilot of Court Mediation Services was also run in 2010 which found 90 per cent of parties complied with mediated agreements compared with 67 per cent for court judgments. Similarly the University of Strathclyde’s Mediation Clinic reported high settlement and compliance rates. The clinic has been offering small claims mediation in Glasgow Sheriff Court from 2014. In the first year, they conducted 39 mediations with 79 per cent of cases settling. The terms of settlement were fulfilled in 95 per cent of those cases. It is clear mediation is working in certain scenarios in both Edinburgh and Glasgow Sheriff Court.

So why is ADR not being used more?

Ultimately the success of these projects is often reliant on volunteers, an unsustainable model in the long term. Funding of ADR is at the core of the Justice Committee’s consideration in their October 2018 paper. The continued funding of ADR is undoubtedly a barrier to wider uptake in the civil justice system. For example, a person’s costs associated with mediation can be funded out of the legal aid budget for civil cases. However, only solicitors can apply for legal aid; mediators cannot. Legal aid is currently not available for other forms of ADR such as arbitration which in turn could force people to either resolve dispute in court, or through mediation.

Surely the whole point of widening the scope of ADR is to give parties a genuine choice as to how the dispute is resolved, not a limited choice due to financial restraints.

A working example of the use of ADR is in the Simple Procedure which came into force in November 2016 replacing Small Claims and Summary Cause actions. The new Simple Procedure Rules require Sheriffs “to encourage cases to be resolved by negotiation or alternative resolution where possible” (Rule 1.4(3)).

Different courts have been taking different approaches. The combination of the variation in approach from the sheriffs, the lack of funding, and lack of clear guidance about when ADR should be used has resulted in a patchy and inconsistent system. Ultimately it comes back to funding. The Committee acknowledges that particular consideration is required in relation to Simple Procedure cases and how an in-court ADR Service could be used and funded to provide a more consistent outcome throughout Scotland.

So is it time for mandatory Alternative Dispute Resolution?

England and Wales have stopped short of making ADR compulsory with statutory provisions and court rules operating together to give ADR, particularly mediation, a greater role than in Scotland. However, choice must stay central to resolving any dispute. Whilst there are clear benefits to ADR and the apparent quicker, cheaper and more flexible resolution, there is no one ADR fits all solution. There will be cases where the use of ADR might not be appropriate, so a balance must be struck between offering a cost-effective, efficient alternative to court whilst acknowledging that going to court should remain a fundamental part of the civil justice system in Scotland.

Tom Brownlee is a Senior Associate with Clyde & Co